Brent Oil Surges Past $100 as Middle East Tensions Rise
New York (AP), Global oil prices surged on Thursday after fighting in the Middle East threatened to slow crude exports. The price of Brent oil, an international standard, hit $100.69 per barrel, its highest since May, following attacks on two Saudi oil tankers in the Red Sea.
The increase in oil prices weighed heavily on Wall Street, with stocks tumbling under pressure from rising costs for businesses and reduced consumer spending power. The S&P 500 fell 1.2%, while the Dow Jones Industrial Average dropped 506 points, or 1%, and the Nasdaq composite sank 2.2%.
Tesla's stock plummeted 14.5% after the company reported a weaker-than-expected profit for the latest quarter, while Alphabet's shares fell 7.1% despite delivering stronger profit and revenue than analysts expected.
The sharp drops in oil prices will exacerbate inflation concerns, potentially prompting the Federal Reserve to raise interest rates. Traders are betting on a 36% chance of a rate hike at next week's meeting, up from nearly 12% just a week ago.